IRS and Partners Look to Start of 2017 Tax Season; Encourage use of IRS.gov and e-File; Warn of Refund Delays

WASHINGTON — The Internal Revenue Service and partners from the states and tax industry today reminded taxpayers that the nation’s 2017 individual income tax filing season opens Jan. 23.

The IRS expects more than 153 million tax returns to be filed this year and taxpayers have until Tuesday, April 18, 2017, to file their 2016 tax returns and pay any tax due. The deadline is extended because the Emancipation Day, a holiday in Washington, D.C., will be observed on Monday, April 17, pushing the nation’s filing deadline to April 18.

"There are a number of important changes this year involving refunds and tax law changes that we encourage people to keep in mind," said IRS Commissioner John Koskinen. “We encourage taxpayers to plan ahead and take a few minutes to review these changes. As we enter the filing season, taxpayers should know that the dedicated workforce of the IRS and the nation's tax community stand ready to help."

Taxpayers that are e-filing can still submit returns to their software provider before Jan. 23. They will hold the return and transmit it to the IRS when the systems open. The IRS also reminds taxpayers that they don’t have to wait until Jan. 23 to contact their tax professional.

In 2016, the IRS issued 111 million individual tax refunds and expects more than 70 percent of taxpayers to receive a refund in 2017. Also, the IRS reminds taxpayers that a new law requires the IRS to hold refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until Feb. 15.

"We encourage taxpayers to file as they normally would, including returns claiming the EITC or ACTC” Koskinen said. “The IRS and the nation's tax community are committed to making this another smooth filing season."

e-Fileand Free File

More than four out of five returns are expected to be filed electronically, with a similar proportion of refunds issued through direct deposit. The IRS encourages taxpayers to plan ahead and take advantage of the online resources available on IRS.gov.

Choosing e-file and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a refund. The IRS anticipates issuing more than nine out of 10 refunds in less than 21 days from the time returns are received.

The IRS Free File program, available at IRS.gov, opens Friday, Jan. 13. Commercial partners of the IRS offer free brand-name software to about 100 million individuals and families with incomes of $64,000 or less. Seventy percent of the nation’s taxpayers are eligible for IRS Free File.

All taxpayers regardless of income will again have access to free online fillable forms, which provide electronic versions of IRS paper forms to complete and file. This option is available through IRS.gov and is free.

Protecting Taxpayers from ID-Theft-Related Refund Fraud

The IRS continues to work with state tax authorities and the tax industry to address tax-related identity theft and refund fraud. As part of the Security Summit, the IRS made significant inroads against fraudulent returns in 2016. While working to stop the issuance of fraudulent refunds, the IRS remains focused on releasing legitimate refunds as quickly as possible in 2017. Thus far, Summit efforts have led to a 50 percent decline in the number of new reports of stolen identities on federal tax returns.

Late last year, Summit leaders detailed new and expanded safeguards for taxpayers in the upcoming 2017 tax season. The 2017 focus revolves around “trusted customer” features that will help ensure the authenticity of the taxpayer and the tax return - before, during and after a tax return is filed. The additional protections will build on the 2016 successes that prevented fraudulent returns and protected tax refunds.

Health Care Basics

Again this year, meeting the tax obligation of the Affordable Care Act for the vast majority of taxpayers will simply mean checking a box to verify everyone on their return has health coverage. For others, IRS.gov/aca features useful information, tips and interactive online tools to help taxpayers with the premium tax credit, the individual shared responsibility requirement and other tax-related provisions of the ACA.

More than 90 percent of all tax returns are prepared using tax return preparation software. This software generally includes tax law help along with reminders and prompts about tax breaks and responsibilities. The IRS reminds taxpayers that a trusted tax professional can also provide helpful information about the tax law. Information on tips about selecting a preparer and national tax professional groups are available on IRS.gov.

The IRS urges all taxpayers to make sure they have all their year-end statements in hand before they file their return. This includes Forms W-2 from employers, Forms 1099 from banks and other payers, and for those claiming the premium tax credit, Form 1095-A from the Marketplace. Doing so will help avoid refund delays and the need to file an amended return later.

Delayed Refunds

The IRS expects to issue more than nine out of 10 refunds in less than 21 days. However, the Protecting Americans from Tax Hikes (PATH) Act mandates the IRS hold refunds on tax returns claiming the EITC or the Additional Child Tax Credit (ACTC) until mid-February. The change helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent tax fraud.

The IRS will begin releasing EITC and ACTC refunds starting Feb. 15, but cautions taxpayers that these refunds likely will not start arriving in bank accounts or on debit cards until the week of Feb. 27. The IRS wants taxpayers to know it will take additional time for their refunds to be processed and for financial institutions to accept and deposit the refunds to bank accounts. The IRS reminds taxpayers many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For EITC and ACTC filers, the three-day holiday weekend involving President’s Day may affect their refund timing.

Where's My Refund? ‎on IRS.gov and the IRS2Go phone app will be updated with projected deposit dates for early EITC and ACTC refund filers a few days after Feb. 15. Taxpayers will not see a refund date on Where's My Refund? ‎or through their software packages until then. The IRS, tax preparers and tax software will not have additional information on refund dates, so Where’s My Refund? remains the best way to check the status of a refund.

Expired Individual Taxpayer Identification Numbers (ITIN)

The PATH Act requires that certain ITINs expire on Jan. 1, 2017. Any ITIN not used on a tax return at least once in the past three years and any ITIN with middle digits of either 78 or 79 (9NN-78-NNNN or 9NN-79-NNNN) must be renewed before a return can be processed. Anyone filing a tax return with an expired ITIN could experience return processing and refund delay as well as denial of some tax benefits until the ITIN is renewed.

An ITIN renewal application could take as long as 11 weeks to process during tax filing season. ITINs are used by people who have tax-filing or payment obligations under U.S. law but are not eligible for a Social Security number.

Help for Taxpayers

The IRS reminds taxpayers they have a variety of options to get help filing and preparing their tax return on IRS.gov. Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) offer free tax help to people who qualify. Go to irs.gov and enter “free tax prep” in the search box to find a nearby VITA or TCE site. The IRS2Go Mobile App can help find free tax preparation assistance, check your refund status and more!

All taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.